EU opens formal antitrust investigation into Amazon’s e-book business

“The European Commission opened a formal antitrust investigation into Amazon’s e-book business on Thursday, opening yet another front in mounting EU scrutiny of America’s global tech giants,” Julia Fioretti reports for Reuters.

“The Commission said it would look in particular into certain clauses included in Amazon’s contracts with publishers,” Fioretti reports. “These clauses, it said, required publishers to inform Amazon about more favorable or alternative terms offered to Amazon’s competitors, a means to ensure Amazon is offered terms at least as good as those of its competitors. The Commission said this could violate EU antitrust rules that prohibit abuses of a dominant market position and restrictive business practices.”

Fioretti reports, “Competition Commissioner Margrethe Vestager said in a statement, ‘Our investigation does not call that into question. However, it is my duty to make sure that Amazon’s arrangements with publishers are not harmful to consumers, by preventing other e-book distributors from innovating and competing effectively with Amazon.'”

Read more in the full article here.

MacDailyNews Take: As opposed to the U.S. DOJ which killed real competition in order to save the appearance of competition.

[Thanks to MacDailyNews Readers “Brian P.” and “CaptainWhizz” for the heads up.]

SEE ALSO:

Apple’s Star Chamber: An abusive judge and her prosecutor friend besiege the tech maker – December 5, 2013
In pretrial view, judge says leaning toward U.S. DOJ over Apple in e-books case – May 24, 2013
Lawyers have complained for years that Judge Denise Cote pre-judges cases before she enters the courtroom – August 14, 2013

Federal appeals court scoffs at U.S. DOJ, Federal Puppet Denise Cote, and Apple’s ‘antitrust monitor’ Bromwich – March 11, 2015
Apple files appeal on e-books compliance monitor; will fight Bromwich’s ‘roving’ investigation, excessive fees – January 18, 2014
Appeals judge expresses doubt towards U.S. government’s e-book antitrust case against Apple – December 15, 2014
Stephen Colbert goes after Amazon, offers ‘I didn’t buy it on Amazon’ stickers – June 5, 2014
Amazon’s Bezos has gone too far: The e-book monopolist may finally face a court of law – May 25, 2014
U.S. Federal Puppet Denise Cote: ‘Apple’s reaction to the existence of a monitorship underscores the wisdom of its imposition’ – January 16, 2014
Judge Denise Cote denies Apple request block her friend as ‘antitrust compliance monitor’ – January 13, 2014
Antitrust monitor Bromwich rebuts Apple accusations of ‘unconstitutional’ investigation – December 31, 2013
Apple seeks to freeze its U.S. e-books ‘antitrust monitor’ – December 15, 2013
The persecution of Apple: Is the U.S. government’s ebook investigation out of control? – December 10, 2013
Apple’s Star Chamber: An abusive judge and her prosecutor friend besiege the tech maker – December 5, 2013
Apple takes aim not just at court-ordered e-books monitor, but also at U.S. District Judge Denise Cote herself – December 2, 2013
U.S.A. v. Apple: Judge Denise Cote assigns DOJ monitor in Apple ebook price-fixing case – October 17, 2013
U.S.A. v. Apple: Judge issues injunction against Apple in ebooks antitrust case; largely in line with what DOJ wanted – September 6, 2013
U.S.A. v. Apple: Judge Denise Cote says Apple needs third-party supervision after ‘blatant’ ebook price fixing – August 28, 2013

12 Comments

    1. How so? Amazon requires publishers to INFORM Amazon of better deals. Apple’s contract required publishers to GIVE the same deal to Apple. True, Amazon may use the info for future contract negotiations, but unlike Apple’s clause does not force the publisher to give the same deal immediately if at all.

  1. “These clauses, it said, required publishers to inform Amazon about more favorable or alternative terms offered to Amazon’s competitors, a means to ensure Amazon is offered terms at least as good as those of its competitors.”

    This is EXACTLY the kind of clause the U.S. DOJ improperly called a “Most Favored Nation” (MFN) clause. Then Judge Cote stupidly agreed with the U.S. DOJ. Then to take the travesty even further, Apple’s lawyers have never (yes, NEVER) formally disagreed with this stupid, incorrect definition.

    It’s not a MFN clause. It’s a “best customer” (BC) clause. It just makes sure your customers are not at a disadvantage to other customers. Guess who is **THE BIGGEST** user of a BC clause in their contracts? The U.S. Government, that’s who.

    MFN clauses are proactive and are structured to get the company the best deal no matter what. MFN clauses can be illegal and violate anti trust rules. BC clauses are not and do not. As the quoted description above states, BC clauses are reactive. There is no forcing function for the customer to get the best deal no matter what. They are a way to keep an even playing field as the customer is given the option to get an equivalent deal.

    Another way to think of a BC clause is a vendor’s offer to “match any verified offer” by a competing vendor if you bring in that proof. If a store has such an offer to match prices/deals and you walk in with that proof with the store subsequently matching the deal, is that store (let’s say it’s one of the major chains with a majority stake in a given region) violating anti trust laws? Absolutely not, they are just making sure the customer gets an equivalent deal.

    Conversely, if the store with majority sales in the region said they’d guarantee match anyone else’s price AND be a minimum of 20% LOWER so as to always guarantee — in advance — that they will significantly beat competitor’s price (effectively an MFN clause) then would that violate anti trust laws? It might, depending upon the details.

    The real questions to ask are, “The U.S. DOJ went after Apple and wrongly classified a BC clause as a MFN clause, and the court instituted draconian measures against Apple after finding Apple guilty. So, since Amazon has the same clauses in its contracts, why hasn’t the U.S. DOJ and Judge Cote gone after Amazon? Why isn’t Amazon paying someone with no background in anti trust a couple thousand dollars an hours to poke around in Amazon’s internal workings?”

    Are Amazon’s lawyers just THAT much better than Apple’s? Is someone getting something to look the other way? Is the U.S. Government just playing favorites? What?

    1. By your definition of the difference between the MFN and BC clauses you have just described the difference between Apple’s (MFN) clause and Amazon’s (BC). As I commented above Apple’s clause restricted any better deals to be made proactively. Amazon’s clause requires that Amazon be informed of a better deal being given which may or may not be effected by Amazon in a future contract negotiation and in no way affects prices immediately.

      Your 2nd example of a BC clause of a vendor offering to match prices seems incorrect in that the outlet selling the product eats the loss reducing their own margins. The distributor/manufacturer does not take any reduction in profit from originally agreed between themselves and the outlet. This would be tantamount to having Apple match any price set by Amazon w/o affecting the wholesale price paid to the publisher agreed upon in their contract with them.

  2. Next week’s news…European Commission investigates Apple profits. So…from hero to zero(and probably the reverse the week after).
    Cue MDN Exorcist-like head spinning episode.

    1. That’s a totally different matter. We are now talking about anti trust.

      Different subjects require different responses.

      If the EU was going after Amazon for something related to Tax, when all evidence showed that Amazon had paid all their Tax as legally required, I and MDN would undoubtedly be supporting
      Amazon.

    1. The explanation might be in some way connected with the vast sums of money that Amazon spends on lobbying in the US.

      The US court system does appear to respond to lobbying and therefore lobbying gets results in America. In the EU, lobbying is much less likely to swing things in your favour.

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